ASIC probes Commonwealth Bank over financial planner forgery

The corporate watchdog is investigating the Commonwealth Bank for failing to come clean about a financial planner who allegedly forged client signatures.

As CBA and ASIC slug it out, the West Australian planner Stuart Jamieson was expelled by the Financial Planning Association (FPA) on July 23, a month after it launched an investigation into his conduct.

A BusinessDay investigation can reveal Mr Jamieson was allowed to resign from the bank’s scandal-ridden advice division, Commonwealth Financial Planning (CFPL), in May 2012 rather than being sacked when allegations of misconduct were uncovered in an internal investigation.

Mr Jamieson’s voluntary departure from CBA meant he was able to go on to two further jobs in the finance sector without clients knowing he departed the bank under a cloud.

ASIC staff are believed to have become aware of the forgery allegations only after BusinessDay began making inquiries about Mr Jamieson in the industry in early July, around the same time FPA had launched its own investigation.

Mr Jamieson’s case mirrors that of another CBA planner, Ricky Gillespie, who, as BusinessDay revealed last year, also allegedly forged client signatures and was allowed to leave the bank rather than being sacked.

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Others allowed to resign include ‘‘Dodgy’’ Don Nguyen, who was banned for seven years in 2011, more than two years after whistleblower Jeff Morris informed ASIC about his misconduct, which included allegations of forgery and inappropriate advice.

Mr Morris said the bank’s failure to file a breach report for more than 20 months in relation to an adviser who was allegedly forging client signatures “is a damning indictment of the current management”.

“What legitimate justification could there be for this outrageous delay? The obvious inference is that CBA did not think it was in their interest to attract further bad publicity for yet another so-called 'rogue' planner,” he said.

Following a Fairfax Media investigation and a Senate inquiry calling for a royal commission, CBA last month reopened compensation to take in up to 400,000 financial planning customers who may have lost money because of shoddy advice.

In a statement CBA said in the lead-up to its compensation program, the group “decided to apply a fresh lens to matters involving an allegation of fraud”. It said it was “reviewing matters where previously it was determined that there was insufficient evidence to warrant a referral to police. Mr Jamieson’s matter was included in this process. His matter has now been referred to the WA Police.”

The FPA said it expelled Mr Jamieson “within a month” of receiving information.

CBA said its financial planning division was a “significantly” transformed business. “One of the issues that we are working with ASIC and an independent expert on following the Enforceable Undertaking is to ensure we identify reportable breaches in a timely manner.” Affected clients had been contacted.

A group of CFPL planners in WA said that ever since Mr Jamieson left in May 2012, ‘‘other advisers have been assigned his clients and files, to try and rectify what has been very bad advice’’.

‘‘We also think there are many other cases like this across Australia that they are trying to keep secret.’’

Mr Jamieson, who is an expert in helping UK expatriates move their pensions to Australia and joined CBA in 2003, could not be reached.

BusinessDay has learnt that the CBA first reported Mr Jamieson to ASIC in 2006 for allegedly breaking the law by failing to provide clients with statements of advice, but he kept his job after satisfying the bank he had cleaned up his act.

The CBA filed a second breach report about Mr Jamieson with ASIC in September 2013 – 16 months after Mr Jamieson resigned – but it is believed the report focused on alleged breaches of the Corporations Act in relation to statements of advice to customers and only touched on the forgery allegations.

It is believed senior ASIC staff are furious they only became fully aware of the forgery allegations last month.

‘‘We have an investigation of the matter under way, which includes looking into the adequacy and timeliness of CBA's breach report,’’ an ASIC spokesman said.

In September 2013 – the month before CBA’s enforceable undertaking expired and as the Senate inquiry was in full swing – Mr Jamieson joined LifeNet, based in industrial Perth suburb Balcatta.

LifeNet operated under a financial services licence held by Suncorp-owned GuardianFP until late June this year, when it shifted to the Securitor network, owned by Westpac.

It is believed Suncorp asked CBA for a reference check but was told it was against company policy.

‘‘We did police and competency checks,’’ a Suncorp spokeswoman said. ‘‘We also checked against the ASIC register – there was nothing there.’’

A Westpac spokesman said that during due diligence on LifeNet, ‘‘information came to light that indicated Stuart Jamieson had not fully disclosed his past compliance background’’.

‘‘We immediately terminated him after 10 working days on our licence, during which time he was not authorised to provide any clients with any advice.’’